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Sempra Energy to divest Argentina assets, take $200 million charge due to bad investment

Sempra Energy to divest Argentina assets, take $200 million charge due to bad investment

Sempra Energy said Wednesday it will shed holdings in two Argentina natural gas distributors and take a loss of about $200 million (euro152 million) due to an investment that soured when that country went into an economic tailspin five years ago.
The San Diego-based company is seeking buyers for its 37 percent stake in Camuzzi Gas Pampeana SA and its 39 percent of Camuzzi del Sur SA, which serve a combined 1.5 million customers in central and southern Argentina.
Any sale would at least partially reduce the $200 million (euro152 million) loss, said Jennifer Andrews, a Sempra spokeswoman.
She said Sempra has invested $366 million (euro278 million) in Argentina since 1996. The country slid into an economic meltdown in 2001.
Sempra is also seeking damages from the Argentine government in a complaint filed with the World Bank's International Center for Investment Disputes, which is expected to render a decision during the first quarter. Sempra claims Argentina violated privatization rules when it ended the peso's peg to the U.S. dollar and froze utility rates, Andrews said.
The decision to exit Argentina "is a continuation of our strategy to shed non-strategic assets and focus on growing our natural gas infrastructure and marketing businesses and our California utilities," said Donald Felsinger, Sempra's chairman and chief executive.
The company owns Southern California Gas Co. and San Diego Gas & Electric Co.
Sempra estimated that its profit would top $4 a share in 2006 _ up from its previous estimate of between $3.50 and $3.70 a share _ mainly because its energy trading business was doing better than expected.
The estimate excludes a $204 million (euro155 million) gain from the sale of Texas power plants in the third quarter and the $200 million (euro152 million) fourth-quarter loss on the Argentine investments.